Employment Rights Bill

Debate between Lord Katz and Viscount Colville of Culross

Committee stage
Tuesday 3rd June 2025 Lords Chamber

[Lord in Waiting/Government Whip (Lord Katz) (Lab)]

My Lords, I thank all noble Lords who contributed to this short but focused and interesting debate. I too regret that the noble Lord, Lord Holmes of Richmond, was unable to attend; with my Whip’s hat on, I note that perhaps if we had made better progress on earlier days of Committee then we would have heard from him directly. I pay tribute to him for tabling Amendment 129, which seeks to prohibit unpaid work experience for a period exceeding four weeks. I thank the noble Viscount, Lord Colville of Culross, for stepping into the breach and making a more than worthy understudy in moving the amendment. I thank my noble friend Lady O’Grady of Upper Holloway and the noble Lords, Lord Goddard and Lord Sharpe of Epsom, for contributing to this debate. This is an important issue, and the noble Lord, Lord Holmes, and others are right to raise it. I pay tribute on the record to his previous work campaigning on this issue, not least through his Private Member’s Bill in the 2017-19 Session.

This Government made a commitment to deliver the biggest upgrade to workers’ rights in a generation. This includes tackling unfair working practices. As we heard from the noble Viscount, there are examples not simply in the creative sector—although that area of our economy is rife with them—but beyond it. This Government absolutely stand by the national minimum wage, and on 1 April delivered an increase of 16.3% to the 18 to 20 national minimum wage rate to make it £10 an hour—a record amount in both cash and percentage terms, making progress on closing the gap with the national living wage. This is an increase of £2,500 to the gross annual earnings of a full-time worker on the NMW. It was the first step in the Government’s plans to remove the discriminatory age bands and ensure that all adults benefit from a genuine living wage, making a real difference to young people.

I think it is worth saying in passing that we welcome, on this side of the House at least, the Conservative Party’s conversion in recent years to supporting the national minimum wage. However, as a member of the party that introduced it in the first place, in the teeth of some quite vehement opposition at the time, I assure noble Lords that this Labour Government are absolutely committed to supporting it and making sure that it applies in all cases where it should.

Work experience or internships can offer individuals, especially younger people, invaluable opportunities and experience. We do not want to close the door on these opportunities, but we do want to ensure that they are open and fair. Most importantly, where workers are due payment, they should be paid the wages they are entitled to, and I have to say that the current legislation already protects them.

As my noble friend Lady O’Grady of Upper Holloway—to whose years of campaigning in this area, through the TUC, I pay tribute—said, there is an aspect of this amendment, very well-intentioned though it is, that would create unintended consequences and raises the spectre of, as she put it, rolling internships of four weeks, on and on.

As we know, according to the Department for Education’s 2022 employer skills survey, around 5% of employers had offered internships, either paid or unpaid, in the preceding 12 months, and there were around 200,000 people on internships. The vast majority of these—88%—were of two weeks or more in duration, and nearly 30% were over six months. It is only right that these people should be paid the national minimum to which they are entitled.

As we have heard, the national minimum wage legislation provides for a number of exemptions to recognise the importance of gaining work experience. It is important to recognise that these examples have a strong and firm place in the economy, including students on placements for up to one year, as required as part of a UK course of either further or higher education, pupils below the compulsory school age, participants in certain government programmes to provide training, work experience or temporary work, and—the noble Lord, Lord Goddard, made this point—voluntary workers employed by a charity or voluntary organisation, providing they receive no monetary payments, except for expenses.

The Government are committed to banning unpaid internships, unless they are part of an educational or training course. Because of the way legislation is drafted, they are already largely banned. For national minimum wage purposes, the crucial fact is whether someone is considered a worker due to the nature of the work they do. Employers cannot simply call someone an intern or say they are doing work experience and not pay them. What matters is whether the arrangement they have makes them a worker for minimum wage purposes. However, one valid exception is work shadowing, which is where individuals are observing others perform tasks and are not performing any work themselves.

There is a risk that the broad-brush nature of this amendment could create loopholes, leaving interns or individuals on work experience open to abuse. Where an intern is carrying out tasks, they are a worker and therefore entitled to the national minimum wage. Accepting the amendment could mean that these individuals could be recruited for short-term roles and lose their entitlement to the minimum wage, even if they are performing work. The Government will be consulting on this issue soon. We want to engage with businesses and individuals who carry out internships or work experience. This is how we introduce change to ensure that individuals are protected and treated fairly.

We have heard from both the noble Viscount, Lord Colville, and my noble friend Lady O’Grady that enforcement is the issue here. The noble Viscount, Lord Colville, asked about the number of prosecutions. I am afraid I do not have that number to hand, but I will certainly undertake to write to the noble Viscount. Enforcement of any law is important, and I am sure that part of the consultation will cover issues of enforcement. Creating more laws but not solving the problem of enforcement would not actually get to the heart of the issue, which is making sure that, when people work, they are paid the national minimum to which they are entitled.

In that vein, I hope that we can deal with the issues the noble Lord, Lord Holmes, wishes to address most effectively outside the Bill. I therefore ask the noble Viscount, on behalf of the noble Lord, Lord Holmes of Richmond, to withdraw Amendment 129.

[Viscount Colville of Culross (CB)]

My Lords, this has been a short but informative debate and I am grateful to noble Lords who contributed. I listened very hard to the comments from both the Minister and the noble Baroness, Lady O’Grady, on making sure that we enforce the national minimum wage. The national minimum wage has been in force since, I think, 1998. That is a long time for it not to be enforced, and it includes a time when there was a Labour Government. I very much hope that this will be an extra nudge to make sure that it is enforced and HMRC is given very direct instructions to make sure it happens. As the noble Baroness pointed out, the lack of enforcement is very deleterious to getting working class people into work.

On the noble Baroness’s and the Minister’s concern about it creating a revolving door, surely it cannot be beyond the wit of us to work out that, after you have done your four weeks of work experience, you are not allowed to go back or to stay—that is why we have a four-week block. It is useful to carve out a particular role for people who are there just for educational or work experience reasons, which is quite separate from being an intern.

I hope very much that the Minister and the Government will take on board this amendment and these thoughts as they contribute to the effort to stamp out unfair work practices. On that note, I beg leave to withdraw the amendment.